Tea farming and its economics—the impact of global demand on local growers
The Changing World of Tea: Challenges and Opportunities
Tea has become an important part of many cultures, economies, and daily routines around the world. From traditional tea ceremonies to modern health trends, tea plays a much bigger role than just being a drink. According to the UK Tea and Infusions Association, around 5 billion cups of tea are consumed globally every day. Over 60 tropical and subtropical countries work together to meet this massive demand. A large part of tea farming is done by smallholder farmers. However, behind the beautiful tea estates lies a complex system affected by shifting global demand, changing consumer habits, and rising environmental concerns.
Challenges Faced by Tea Growers
Even though tea consumption is increasing, local tea farmers face many challenges. These include unpredictable pricing, sudden weather changes, and limited financial resources. The growing interest in herbal and artisanal teas is also reshaping the industry. Addressing these challenges is essential for the future of fair and sustainable tea farming.
Price Fluctuations and Global Demand
Tea prices are influenced by many factors such as consumer trends, government policies, and the global economy. Like many other goods, tea prices have recently increased. According to Statista, in 2023, the average cost of one kilogram of tea in India was ₹171. Green tea was the most expensive, at ₹352 per kilogram. This rise in prices is linked to global tensions and environmental issues.
Impact on Small Farmers
Small-scale farmers are hit hardest by market changes. They often don’t have savings to survive economic slumps. When demand rises, farmers may overproduce, which can lower prices and trap them in debt.
To increase yields, some farmers turn to harmful farming practices. New methods like precision agriculture can help by improving water use, soil health, and pest control. But many farmers can’t afford this technology, which leads to poor soil quality and lower crop standards. In Assam, for example, tea farmers are struggling to keep up with market changes while trying to survive.
Changing Consumer Preferences
Today, people are more focused on health and sustainability, leading to changes in the tea market. Organic and pesticide-free teas are becoming more popular. Among these, artisanal teas—which are handcrafted by skilled tea makers—have gained major popularity worldwide. According to The Brainy Insights, the global artisanal tea market is expected to reach USD 10.74 billion by 2033, with strong growth from Asia-Pacific countries like India.
Key Players in the Global Tea Industry
Countries like India, China, Sri Lanka, and Kenya play major roles in the global tea trade. India is the second-largest tea producer and the top producer of black tea. It also ranks fourth in global tea exports. Also Read | Indian Tea Association suggests floor price for hit growers
To support the tea sector, the Indian government has launched several initiatives. The Tea Board of India has rolled out a ₹664.09 crore project to increase domestic tea use, improve prices for growers, and boost exports. Farmer Producer Companies and Self-Help Groups have also been formed to support small farmers and improve tea quality. These efforts are key to helping farmers and securing the future of the tea industry.
Climate Change and Its Effects
Climate change is a growing threat to tea production. Irregular weather, erratic rainfall, and rising temperatures are already affecting both the quantity and quality of tea crops. According to the Ethical Tea Partnership, ideal tea-growing conditions in Kenya, Sri Lanka, and China could shrink by 26.2%, 14%, and 4.7% respectively due to climate change. In response, farmers are turning to sustainable practices like reusing waste, using renewable energy, and adopting eco-friendly farming methods.
Looking Ahead
The tea industry is shaped by changing consumer demand, price swings, and environmental challenges. While there’s a growing trend toward healthier, specialty teas, small farmers continue to struggle with low earnings, unstable markets, and the impacts of climate change.
For the tea industry to thrive, both governments and industry leaders need to create supportive policies. Despite the challenges, the global tea market has a bright future, with exciting new opportunities for tea lovers everywhere.
— The author is Founder, The Infused Kettle
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